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[Federal Register Volume 79, Number 85 (Friday, May 2, 2014)]
[Rules and Regulations]
[Pages 24999-25002]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10037]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 1005, 1006 and 1007

[Doc. no. AMS-DA-07-0059; AO-388-A22, AO-356-A43 and AO-366-A51; DA-07-
03]

Milk in the Appalachian, Florida, and Southeast Marketing Areas; 
Order Amending the Orders

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule amends the Class I pricing provisions and the 
maximum administrative assessment for the Appalachian, Florida and 
Southeast marketing orders. This final rule also amends certain 
features of the diversion limit, touch-base and transportation credit 
provisions of the Appalachian and Southeast milk marketing orders. More 
than the required number of producers approved the issuance of the 
orders as amended.

DATES: Effective Date: May 5, 2013.

FOR FURTHER INFORMATION CONTACT: William G. Francis, USDA/AMS/Dairy 
Programs, Order Formulation and Enforcement Branch, STOP 0231-Room 
2971, 1400 Independence Avenue SW., Washington, DC 20250-0231, (202) 
720-7183, email address: William.francis@ams.usda.gov.

SUPPLEMENTARY INFORMATION: The provisions adopted in this final rule: 
(1) Adjust the Class I pricing surface in each county within the 
geographical boundaries of the Appalachian, Florida and Southeast 
marketing orders; (2) Make diversion limit standards identical for the 
Appalachian and Southeast orders: 25 percent of deliveries to pool 
plants during the months of January, February, July, August, September, 
October, and November, and 35 percent in the months of March, April, 
May, June, and December; (3) Reduce touch-base standards to one day 
each month for the Appalachian and Southeast orders; (4) Add January 
and February as months when transportation credits are paid for the 
Appalachian and Southeast orders; (5) Provide for the payment of 
transportation credits in the Appalachian and Southeast orders for full 
loads of supplemental milk; (6)

[[Page 25000]]

Provide more flexibility in the qualification requirements for 
supplemental milk producers to receive transportation credits for the 
Appalachian and Southeast orders; and (7) Increase the monthly 
transportation credit assessment from $0.20 per hundredweight (cwt) to 
$0.30 per (cwt) in the Southeast order. This final rule also increases 
the maximum administrative assessment for the Appalachian, Florida, and 
Southeast orders from $0.05 per cwt to $0.08 per cwt.
    A partial tentative final decision concerning all of the proposed 
amendments except for increasing the administrative assessment rates 
was published in the Federal Register (73 FR 11194). Increasing the 
maximum administrative assessment was initially addressed in a separate 
partial recommended decision (73 FR 11062). No comments were received 
concerning this recommended decision. A final decision concerning all 
proposed amendments was published in the Federal Register (79 FR 
12963). Accordingly, this final rule adopts proposed amendments 
detailed in the final decision (79 FR 12963).

Executive Orders 12866 and 13563

    This administrative action is governed by the provisions of 
sections 556 and 557 of Title 5 of the United States Code and, 
therefore, is excluded from the requirements of Executive Orders 12866 
and 13563.

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have a retroactive 
effect. The Agricultural Marketing Agreement Act of 1937, as amended (7 
U.S.C. 601-674) (Act), provides that administrative proceedings must be 
exhausted before parties may file suit in court. Under section 
608c(15)(A) of the Act, any handler subject to an order may request 
modification or exemption from such order by filing with the U.S. 
Department of Agriculture (USDA) a petition stating that the order, any 
provision of the order, or any obligation imposed in connection with 
the order is not in accordance with the law. A handler is afforded the 
opportunity for a hearing on the petition. After a hearing, USDA would 
rule on the petition. The Act provides that the district court of the 
United States in any district in which the handler is an inhabitant, or 
has its principal place of business, has jurisdiction in equity to 
review USDA's ruling on the petition, provided a bill in equity is 
filed not later than 20 days after the date of the entry of the ruling.

Executive Order 13175

    This rule has been reviewed in accordance with Executive Order 
13175, Consultation and Coordination With Indian Tribal Governments. 
The review reveals that this regulation will not have substantial and 
direct effects on Tribal Governments and will not have significant 
Tribal implications.

Regulatory Flexibility Act and Paperwork Reduction Act

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), the Agricultural Marketing Service has considered the economic 
impact of this action on small entities and has certified that this 
rule would not have a significant economic impact on a substantial 
number of small entities. For the purposes of the Regulatory 
Flexibility Act, a dairy farm is considered a small business if it has 
an annual gross revenue of less than $750,000, and a dairy products 
manufacturer is a small business if it has fewer than 500 employees.
    For the purposes of determining which dairy farms are small 
businesses, the $750,000 per year criterion was used to establish a 
marketing guideline of 500,000 pounds per month. Although this 
guideline does not factor in additional monies that may be received by 
dairy producers, it should be an inclusive standard for most small 
dairy farmers. For purposes of determining a handler's size, if the 
plant is part of a larger company operating multiple plants that 
collectively exceed the 500-employee limit, the plant will be 
considered a large business even if the local plant has fewer than 500 
employees.
    During May 2007, the time of the hearing, there were 2,744 dairy 
farms pooled on the Appalachian order (Order 5). For the Southeast 
order (Order 7), 2,924 dairy farms were pooled on the order. For the 
Florida order (Order 6), 283 dairy farms were pooled on the order. Of 
these, 2,612 dairy farms in Order 5 (or 95.2 percent), 2,739 dairy 
farms in Order 7 (or 94 percent) and 153 dairy farms in Order 6 (or 54 
percent) were considered small businesses.
    During May 2007, there were a total of 36 plants associated with 
the Appalachian order (22 fully regulated plants, 10 partially 
regulated plants, 2 producer-handlers, and 2 exempt plants). A total of 
55 plants were associated with the Southeast order (33 fully regulated 
plants, 9 partially regulated plants, 2 producer-handlers, and 11 
exempt plants). A total of 25 plants were associated with the Florida 
order (13 fully regulated plants, 9 partially regulated plants, 1 
producer-handler, and 2 exempt plants). The number of plants meeting 
small business criteria under the Appalachian, Southeast and Florida 
orders were 8 (or 22.2 percent), 18 (or 32.7 percent), and 11 (or 44 
percent), respectively.
    The adopted amendments in this final rule provide for an increase 
in Class I prices in the Appalachian, Southeast, and Florida orders 
(southeastern orders). The minimum Class I prices of the southeastern 
orders, as with all other Federal milk marketing orders, are set by 
using the higher of an advance Class III or Class IV price, as 
determined by USDA, and adding a location-specific differential, 
referred to as a Class I differential. Minimum Class I prices charged 
to regulated handlers are applied uniformly to both large and small 
entities. At the time of the hearing, the Department estimated that the 
proposed Class I price increases would generate higher marketwide pool 
values in all three southeastern orders of approximately $18-19 million 
for the Appalachian order, $17.5 million for the Southeast order, and 
$38 million for the Florida order, on a monthly basis. It was estimated 
that monthly minimum prices paid to dairy farmers (blend prices) would 
increase approximately $0.26 per cwt for the Appalachian order, $0.64 
per cwt for the Southeast order, and $1.20 per cwt for the Florida 
order.
    The Class I price increases were implemented on an interim basis 
effective May 1, 2008.\1\ As a result of those increases, marketwide 
pool values were increased in 2011 by approximately $16 million in the 
Appalachian order, $38 million in the Florida order, and $16 million in 
the Southeast order. This resulted in an increase in 2011 monthly 
minimum prices paid to dairy farms of $0.25 per cwt for the Appalachian 
order, $1.25 per cwt in the Florida order, and $1.25 per cwt in the 
Southeast order.
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    \1\ Official notice is taken of 73 FR 14153.
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    The adopted amendments revise the Appalachian and Southeast orders 
by making the diversion limit standards for the orders identical--not 
to exceed 25 percent for the months of January, February, and July 
through November, and 35 percent for the months of March through June 
and for the month of December. Prior to their interim adoption, the 
diversion limit standards of the Appalachian order for pool plants and 
cooperatives acting as handlers were not to exceed 25 percent for the 
months of July through November, and January and February; and 40 
percent

[[Page 25001]]

for the months of December and March through June. For the Southeast 
order, the diversion limit standards for pool plants and cooperatives 
acting as handlers were not to exceed 33 percent during the months of 
July through December, and 50 percent in the months of January through 
June.
    In addition, the adopted amendments establish identical touch-base 
standards of at least one days' milk production each month by a dairy 
farmer in the Appalachian and Southeast orders. Prior to their interim 
adoption, the Appalachian order had a touch-base standard of 6 days' 
production in any month of July through December and not less than 2 
days' production in each of the months of January through June. Prior 
to their interim adoption, the Southeast order had a touch-base 
standard of not less than 10 days' production for the months of July 
through December and not less than 4 days' production for the months of 
January through June.
    The adopted amendments to the pooling standards revise established 
criteria that determine those producers, producer milk and plants that 
have a reasonable association with and are consistently serving the 
fluid needs of the Appalachian and Southeast marketing areas. Criteria 
for pooling are established on the basis of performance levels that are 
considered adequate to meet the Class I needs and determine those 
producers who are eligible to share in the revenue that arises from the 
classified pricing of milk. The criteria for pooling are established 
without regard to the size of any dairy industry or entity. The 
criteria established are applied in an identical fashion to both large 
and small businesses and do not have any different economic impact on 
small entities as opposed to large entities.
    The adopted amendments add January and February to the months of 
July though December as months when transportation credits may be paid 
to those handlers who incur the costs of providing supplemental milk 
for the Appalachian and Southeast orders. The amendments also expand 
the payment of transportation credits for supplemental milk to include 
the full load of milk rather than the calculated Class I portion and 
provide more flexibility in the qualification requirements for 
supplemental milk to receive transportation credits. In addition, the 
maximum monthly transportation credit assessment for the Southeast 
order is increased from the current $0.20 per cwt to $0.30 per cwt on 
all milk assigned to Class I use. The transportation credit provisions 
are applicable only to the Appalachian and Southeast orders and are 
applied in an identical fashion to both large and small businesses and 
will not have any different impact on those businesses producing 
manufactured milk products. The changes will not have a significant 
economic impact on a substantial number of small entities.
    The adopted amendments also allow the Market Administrators of the 
Appalachian, Southeast, and Florida orders to increase the maximum 
administrative assessment from the current $0.05 per cwt to $0.08 per 
cwt if necessary to maintain adequate funds for the operation of the 
orders. Administrative assessments are charged without regard to the 
size of any dairy handler or entity.
    The adopted amendments will affect all producers and handlers 
equally regardless of their size. Accordingly, the amendments will not 
have a significant economic impact on a substantial number of small 
entities.
    A review of the reporting requirements was completed under the 
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). It was 
determined that these amendments would have no impact on reporting, 
recordkeeping or other compliance requirements because they would 
remain identical to the current requirements. No new forms are proposed 
and no additional reporting requirements would be necessary.

E-Government Act

    The Agricultural Marketing Service (AMS) is committed to complying 
with the E-Government Act, to promote the use of the Internet and other 
information technologies to provide increased opportunities for citizen 
access to Government information and services, and for other purposes.

Prior Documents in This Proceeding

    Notice of Hearing: Issued May 3, 2007; published May 8, 2007 (72 FR 
25986).
    Partial Tentative Final Decision: Issued February 25, 2008; 
published February 29, 2008 (73 FR 11194).
    Partial Recommended Decision: Issued February 25, 2008; published 
February 29, 2008 (73 FR 11062).
    Interim Final Rule: Issued March 12, 2008; published March 17, 2008 
(73 FR 14153).
    Correcting Amendments: Issued May 6, 2008; published May 9, 2008 
(73 FR 26513).
    Final Decision: Issued February 25, 2014; published March 7, 2014 
(79 FR 12963).

Findings and Determinations

    The findings and determinations hereinafter set forth supplement 
those that were made when the Appalachian, Florida and Southeast orders 
were first issued and when they were amended. The previous findings and 
determinations are hereby ratified and confirmed, except where they may 
conflict with those set forth herein.
    The following findings are hereby made with respect to the 
Appalachian, Florida, and Southeast marketing orders:
    (a) Findings upon the basis of the hearing record.
    A public hearing was held upon certain proposed amendments to the 
tentative marketing agreements and to the orders regulating the 
handling of milk in the Appalachian, Florida, and Southeast marketing 
areas. The hearing was held pursuant to the provisions of the 
Agricultural Marketing Agreement Act of 1937, as amended (Act) (7 
U.S.C. 601-674), and the applicable rules of practice and procedure (7 
CFR part 900).
    Upon the basis of the evidence introduced at such hearing and the 
record thereof, it is found that:
    (1) The said orders as hereby amended, and all of the terms and 
conditions thereof, will tend to effectuate the declared policy of the 
Act;
    (2) The parity prices of milk, as determined pursuant to section 2 
of the Act, are not reasonable in view of the price of feeds, available 
supplies of feeds, and other economic conditions which affect market 
supply and demand for milk in the aforesaid marketing areas. The 
minimum prices specified in the orders as hereby amended are such 
prices as will reflect the aforesaid factors, insure a sufficient 
quantity of pure and wholesome milk, and be in the public interest; and
    (3) The said orders, as hereby amended, regulate the handling of 
milk in the same manner as, and is applicable only to persons in the 
respective classes of industrial or commercial activity specified in, a 
marketing agreement upon which a hearing has been held.
    (b) Additional Findings. The amendments to these orders are known 
to handlers. The final decision containing the proposed amendments to 
this order was issued on February 25, 2014 and published in the Federal 
Register on March 7, 2014 (79 FR 12963).
    The changes that result from these amendments will not require 
extensive preparation or substantial alteration in the method of 
operation for handlers. In view of the foregoing, it is hereby found 
and determined that good cause exists

[[Page 25002]]

for making these amendments effective following May 5, 2014. It would 
be contrary to the public interest to delay the effective date of these 
amendments for 30 days after their publication in the Federal Register. 
(Sec. 553(d), Administrative Procedures Act, 5 U.S.C. 551-559.)
    (c) Determinations. It is hereby determined that:
    (1) The refusal or failure of handlers (excluding cooperative 
associations specified in section 8c(9) of the Act) of more than 50 
percent of the milk, which is marketed within the specified marketing 
areas, to sign a proposed marketing agreement, tends to prevent the 
effectuation of the declared policy of the Act;
    (2) The issuance of this order amending the Appalachian, Florida, 
and Southeast orders is the only practical means pursuant to the 
declared policy of the Act of advancing the interests of producers as 
defined in the orders as hereby amended;
    (3) The issuance of this order amending the Appalachian, Florida, 
and Southeast orders is favored by at least two-thirds of the producers 
who were engaged in the production of milk for sale in the respective 
marketing areas.

List of Subjects in 7 CFR Parts 1005, 1006 and 1007

    Milk marketing orders.

Order Relative to Handling

    It is therefore ordered, that on and after the effective date 
hereof, the handling of milk in the Appalachian, Florida, and Southeast 
marketing areas shall be in conformity to and in compliance with the 
terms and conditions of the orders, as amended, and as hereby amended, 
as follows:
    The provisions of the order amending the orders contained in the 
interim amendments of the orders issued by the Administrator, 
Agricultural Marketing Service, on March 12, 2008, and published in the 
Federal Register on March 17, 2008, (72 FR 14153) and as corrected in 
the correcting amendments issued May 6, 2008, and published May 9, 
2008, (73 FR 26513) are adopted and shall be the terms and provisions 
of these orders.
    For the reasons set forth in the preamble, 7 CFR parts 1005, 1006 
and 1007 are amended as follows:

0
1. The authority citation for 7 CFR parts 1005, 1006 and 1007 continues 
to read as follows:

    Authority:  7 U.S.C. 601-674, and 7253

PART 1005--MILK IN THE APPALACHIAN MARKETING AREA

0
2. Section 1005.85 is revised, to read as follows:

Sec.  1005.85  Assessment for order administration.

    On or before the payment receipt date specified under Sec.  
1005.71, each handler shall pay to the market administrator its pro 
rata share of the expense of administration to the order at a rate 
specified by the market administrator that is no more than $.08 per 
hundredweight with respect to:
    (a) Receipts of producer milk (including the handler's own 
production) other than such receipts by a handler described in Sec.  
1000.9(c) of this chapter that were delivered to pool plants of other 
handlers;
    (b) Receipts from a handler described in Sec.  1000.9(c) of this 
chapter;
    (c) Receipts of concentrated fluid milk products from unregulated 
supply plants and receipts of nonfluid milk products assigned to Class 
I use pursuant to Sec.  1000.43(d) of this chapter and other source 
milk allocated to Class I pursuant to Sec.  1000.44(a)(3) and (8) of 
this chapter and the corresponding steps of Sec.  1000.44(b) of this 
chapter, except other source milk that is excluded from the 
computations pursuant to Sec.  1005.60(d) and (e); and
    (d) Route disposition in the marketing area from a partially 
regulated distributing plant that exceeds the skim milk and butterfat 
subtracted pursuant to Sec.  1000.76(a)(1)(i) and (ii) of this chapter.

PART 1006--MILK IN THE FLORIDA MARKETING AREA

0
3. Section 1006.85 is revised to read as follows:

Sec.  1006.85  Assessment for order administration.

    On or before the payment receipt date specified under Sec.  
1006.71, each handler shall pay to the market administrator its pro 
rata share of the expense of administration of the order at a rate 
specified by the market administrator that is no more than $.08 per 
hundredweight with respect to:
    (a) Receipts of producer milk (including the handler's own 
production) other than such receipts by a handler described in Sec.  
1000.9(c) of this chapter that were delivered to pool plants of other 
handlers;
    (b) Receipts from a handler described in Sec.  1000.9(c) of this 
chapter;
    (c) Receipts of concentrated fluid milk products from unregulated 
supply plants and receipts of nonfluid milk products assigned to Class 
I use pursuant to Sec.  1000.43(d) of this chapter and other source 
milk allocated to Class I pursuant to Sec.  1000.44(a)(3) and (8) 
chapter and the corresponding steps of Sec.  1000.44(b) of this 
chapter, except other source milk that is excluded from the 
computations pursuant to Sec.  1006.60(d) and (e); and
    (d) Route disposition in the marketing area from a partially 
regulated distributing plant that exceeds the skim milk and butterfat 
subtracted pursuant to Sec.  1000.76(a)(1)(i) and (ii) of this chapter.

PART 1007--MILK IN THE SOUTHEAST MARKETING AREA

0
4. Section 1007.85 is revised, to read as follows:

Sec.  1007.85  Assessment for order administration.

    On or before the payment receipt date specified under Sec.  
1007.71, each handler shall pay to the market administrator its pro 
rata share of the expense of administration of the order at a rate 
specified by the market administrator that is no more than $.08 per 
hundredweight with respect to:
    (a) Receipts of producer milk (including the handler's own 
production) other than such receipts by a handler described in Sec.  
1000.9(c) of this chapter that were delivered to pool plants of other 
handlers;
    (b) Receipts from a handler described in Sec.  1000.9(c) of this 
chapter;
    (c) Receipts of concentrated fluid milk products from unregulated 
supply plants and receipts of nonfluid milk products assigned to Class 
I use pursuant to Sec.  1000.43(d) of this chapter and other source 
milk allocated to Class I pursuant to Sec.  1000.44(a)(3) and (8) of 
this chapter and the corresponding steps of Sec.  1000.44(b) of this 
chapter, except other source milk that is excluded from the 
computations pursuant to Sec.  1007.60(d) and (e); and
    (d) Route disposition in the marketing area from a partially 
regulated distributing plant that exceeds the skim milk and butterfat 
subtracted pursuant to Sec.  1000.76(a)(1)(i) and (ii) of this chapter.

    Dated: April 28, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-10037 Filed 5-1-14; 8:45 am]
BILLING CODE 3410-02-P
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